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Binance slapped with a new class-action lawsuit in Canada

By:
on Apr 23, 2024
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  • Binance has been charged with securities law violations in Canada
  • Plaintiffs claim Binance sold crypto derivatives to retail investors unlawfully.
  • The legal proceedings are ongoing despite Binance's departure from Canada in 2023.

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Cryptocurrency exchange Binance is embroiled in a legal battle in Canada as it faces a class-action lawsuit for allegedly breaching local securities laws.

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The lawsuit, filed in Ontario’s Superior Court of Justice, accuses Binance of selling crypto derivative products to retail investors without proper registration, contravening the Ontario Securities Act (OSA) and federal law.

The charges against Binance

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The plaintiffs, represented by Christopher Lochan and Jeremy Leeder, argue that Binance’s sale of crypto derivatives products has harmed Canadian investors. They claim that tens of thousands of Canadian users invested in these products, which were offered unlawfully.

The lawsuit seeks damages and rescission of the alleged unlawful trades, highlighting the significant presence of retail investors in the cryptocurrency derivatives market.

The case casts a spotlight on the regulatory complexities surrounding cryptocurrency exchanges and underscores the need for adherence to securities laws, particularly concerning retail investor protection.

Class action in spite of Binance leaving Canada

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Notably, the legal action against Binance follows previous warnings from the Ontario Securities Commission (OSC).

In June 2021, Binance announced plans to cease operations in Canada after receiving a warning from the OSC. However, the OSC’s investigation into Binance’s activities continued, leading to further scrutiny.

Despite Binance’s departure from Canada in May 2023, local authorities have persisted in their investigations, indicating ongoing regulatory concerns surrounding the exchange’s practices.

As the lawsuit unfolds, Binance’s response to the allegations and its strategy for navigating the legal landscape will be closely watched by market participants and regulatory authorities alike seeing that it is also facing legal handles in the U.S. and other countries.

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